Student loan servicer MOHELA tells advocacy group to stop ‘misleading claims’ (2024)

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Student loan servicer MOHELA tells advocacy group to stop ‘misleading claims’? ›

Student loan servicer MOHELA tells advocacy group to stop 'misleading claims' One of the nation's largest student loan servicers is threatening legal action against an advocacy group that wrote a blistering report on its business practices.

In the coming months, MOHELA will be reaching out to their borrowers to let them know that their accounts with MOHELA will be transitioning to a new servicing platform. Borrower accounts will continue to be transferred throughout the winter and spring, at which point the new loan servicing platform will go live.

The servicer sent the wrong bills to approximately 280,000 borrowers and failed to send timely billing statements to 2.5 million borrowers, leading 800,000 borrowers to become delinquent on their loans. Then, MOHELA employed a “call deflection” scheme to push borrowers away from getting the help they needed.

The accusations against the Missouri Higher Education Loan Authority, better known as MOHELA, were laid out in a 47-page report released Wednesday by the American Federation of Teachers and the Student Borrower Protection Center, which alleged four in 10 of MOHELA's borrowers have been affected by “servicing failures,” ...

If you work in certain public service jobs and make 120 payments on your Direct Loan(s), you may be eligible to have your loans forgiven. If you are a teacher in a low-income school or educational service agency, you may be eligible for Teacher Loan Forgiveness.

In general, borrowers can sue a student loan servicer. If there is a class-action lawsuit against a provider or school, borrowers automatically become a part of the class-action lawsuit but are not directly suing any party.

There are two class-action lawsuits alleging MOHELA mismanaged loans.

As part of its long-term vision for a new online environment for borrowers, the U.S. Department of Education (ED) will begin transitioning the servicing of the PSLF Program and the TEACH Grant Program from its sole interim PSLF servicer, MOHELA, to ED via StudentAid.gov beginning May 1, 2024.

Most companies in the student loan industry get lukewarm reviews from current and past customers. MOHELA is no exception. With that said, MOHELA is still a credible business. The student loan company currently boasts an A+ rating with the Better Business Bureau.

Who is the MOHELA ombudsman? ›

The MOHELA Ombudsman's goal is to help borrowers successfully repay their student loans, resolve their account dispute or concerns in a timely manner and to provide them with excellent customer service.

MOHELA is a company that services federal student loans by collecting and tracking payments. Also called the Higher Education Loan Authority of the State of Missouri, it's a nonprofit servicer that manages both federal and private student loans.

According to MOHELA only “65% of involved borrowers paid on time or owed nothing,” meaning that the remaining 35% of the 2.5 million people who did not receive a bill from MOHELA failed to pay—or 875,000 people in total. MOHELA confesses that it was not adequately staffed to meet the needs of its customers.

We are transitioning to a new loan servicing platform.

As a part of this process, you will receive a notice that indicates you are about to transition to the new platform. You will then be notified by us when the transition is complete and your loans have been loaded to the new loan servicing platform.

The CFPB is one of the federal agencies responsible for overseeing private and federal student loan products and servicers. You can submit a complaint through CFPB's online complaint system or by calling 855-411-2372. U.S. Department of Education (DOE).

If you work in certain public service jobs and have made 120 payments on your Direct Loans, you may be eligible to have your loans forgiven. If some or all of your payments were not made on a qualifying repayment plan for PSLF, you may be able to receive loan forgiveness under a temporary opportunity.

Get to Know MOHELA

In partnership with the U.S. Department of Education, we are contracted to service federally-owned student loans. As your knowledgeable and approachable go-to resource for account information and repayment options, we provide the tools to help you successfully repay your student loan.

Raymond Bayer, Jr. - Chief Executive Officer - MOHELA | LinkedIn.

MOHELA is facing a class-action lawsuit from borrowers who allege the company repeatedly failed to process their PSLF applications. Come May 1, the company will no longer be the sole servicer for the loan forgiveness program as the Education Department revamps its servicing operations.

Major student loan company MOHELA accused of 'deflecting' calls, mismanagement.

Why did MOHELA put me on administrative forbearance? ›

MOHELA administrative forbearance

Others received bills with incorrect payment amounts. As a result, the Education Department instructed MOHELA to put affected borrowers into an administrative forbearance until the issue was resolved. The Department also said it would withhold $7.2 million in pay from MOHELA.

Contact Your Loan Servicer

Follow up in writing so you have a physical record of what has been said and done. Request a copy of your customer service history; some loan servicers make available copies of the notes that customer service representatives make on your account.

Borrowers apply for borrower defense if they believe their school misled them or lied to them about something central to their decision to enroll and take out loans. If you think your situation qualifies for borrower defense, submit a borrower defense application.

Additionally, the cancelation of these loans is fundamentally unfair. It will occur at the expense of Americans who have worked hard, repaid their debts or chosen not to go to college at all. In a country that has always rewarded hard work and personal responsibility, this move is, quite simply, unprecedented.

MOHELA administrative forbearance

Others received bills with incorrect payment amounts. As a result, the Education Department instructed MOHELA to put affected borrowers into an administrative forbearance until the issue was resolved.

According to the Education Department, the entire PSLF program will essentially be on pause during that time. “Beginning on May 1, 2024, you will no longer be able to access your PSLF progress, certified employment, or payment counts on MOHELA's borrower portal,” says the department.

What types of student loans does MOHELA service? MOHELA services federal student loans, including all loans being paid off with the Public Service Loan Forgiveness (PSLF) program. MOHELA is also the loan servicer for some private student loan companies, like SoFi and Laurel Road.

Congress recently passed a law preventing further extensions of the payment pause. Student loan interest will resume starting on Sept. 1, 2023, and payments will be due starting in October. We will notify borrowers well before payments restart.